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Health Savings Accounts survive Obamacare!

I thought Obamacare would have HSAs targeted to go the way of the dinosaur, but (thankfully) I was wrong!

Click on my tailgate to read ObamaCare vs HSAs

Since everyone will be required by penalty of law to purchase health insurance, the lower cost premiums associated with HSA qualified High Deductible Health Plans are poised to be more popular than ever!

Yes, there had to be a couple small changes to HSAs such as not allowing over-the-counter medications to be tax deductible (also applies to Flexible Savings Accounts) and the penalty for withdrawals for non-eligible expenses will go up to 20% (currently 10%). Neither of these are enough to deter anyone from the amazing triple tax advantages only available with Health Savings Accounts.

Another part of the recently passed healthcare legislation that will be effective 1/1/2011 is that HSA, HRA and healthcare FSA funds can nolonger be used to pay for non prescription, over the counter (OTC) drugs.

A bigger problem is that “qualified” plans (i.e., the only plans which you’ll be able to get, in a few years) will be required to include first-dollar coverage of routine “preventive” care, such as check-ups. So, no more eliminating the middle-man (insurance company) for such expenditures, and no more $50 check-ups from cheap, no-insurance docs (like mine, http://www.acchealth.com), and no more big price advantage for HDHPs.

When I switched from a 75/25 Blue Cross major medical plan a few years ago to a Celtic HDHP, my monthly premiums went from $300 to $150. Such big savings are doomed, if ObamaCare doesn’t get repealled or greatly revised.

The reason that HSA+HDHP coverage drastically cut costs is that it got rid of the middlemen, and improved efficiency. When I need routine or simple medical care, I pay with an HSA debit card and get a receipt. There’s no insurance involvement at all. But when insurance plans have to cover routine check-ups, they’re not really HDHPs anymore, and they will necessarily cost a lot more.

Worse yet, as of 1/1/2015, “qualified” (gov’t approved) insurance plans will be PROHIBITED from contracting with health care suppliers who do not agree to abide by any and all regulations issued by the Secretary of Health and Human Services. The reason that the Sec. HHS is to be given dictatorial control of American medicine is so that she can impose cost controls (rationing).

But isn’t there a “grandfather clause?” Didn’t Obama promise that if you like your current health insurance you can keep it?

Yes, he promised it, but it was a lie. While the grandfather-clause provision is in the new law, the reality is that no new insurance policies will be allowed which are not approved (“qualified”) by the federal government, and anyone who knows anything about health insurance knows that viability of a customer pool requires a continual influx of new subscribers. Outlaw new subscribers, and you have an aging, ever-more-expensive pool of customers, and in a few years it is no longer economically viable. So, unless ObamaCare is repealed or greatly revised, cheap HDHPs are doomed.

What’s more, ObamaCare is designed to do away with cheap, no-insurance medical practices like my doc’s. When everyone has insurance, and all health insurance plans cover routine check-ups from first dollar, then everyone will need to use a doc who takes insurance, for check-ups.

Who do you go to when you have an injury or illness? Why, the doc who knows you, where you got your last check-up, of course.

So, unless ObamaCare is repealed or greatly revised, cheap, no-insurance medical practices will be put out of business.

It’s sad that one person (Kathleen Sebelius) will have the opportunity to possibly limit HSA expansion. She used to be the Kansas insurance commissioner and had a lot of useful information about the benefits of HSAs on her website. I guess we will find out if she really meant it…

The news for HSAs is not really all that good. The cost of our 2500/5000 BCBS plan, we use to qualify, has skyrocketted over the past 4 years, in an attempt to remain legal under Obamacare, I presume. Our premiums have increased as follows: 2010-36.3%; 2011-28.4%; 2012-20.3%; 2013-70.1%. In short HSA no longer makes sense,

OUCH! Those are enormous premium increases. I hope you are working with an independent insurance agent to shop your health insurance rates with other companies that offer HSA qualified plans. As an independent insurance agent I see dramatic differences in rates for virtually identical HSA qualified plans. If you aren’t working with an independent insurance agent… CALL ME! 913-980-4694

What Is An HSA?

A Health Savings Account (HSA) is a tax-deductible account to which you can contribute to save for future medical expenses or to pay for any day-to-day, qualified medical expenses permitted under federal tax law...[More]

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